The MCA has notified the Companies (Amendment) Act, 2017 effective from 3 January 2018, this shall amend certain existing provisions of the Companies Act 2013.
Key Amendments are as below:
- The definition of “Associate Company” is aligned with Accounting Standard by expanding the meaning of “Significant influence” referring to 20% total voting power instead of share capital
- An explanation is added to the definition of “Holding Company” to include corporates incorporated outside India to be considered as the holding company for the purpose of the Act.
- Change in definition of “Subsidiary Company or Subsidiary” to ensure that voting power can be derived only from equity share capital and not preferential share capital. Amendment of definitions of subsidiary company to ensure that ‘equity share capital’ is the basis for deciding holding-subsidiary relationship rather than “both equity and preference share capital”. By the replacement of the term shares with voting power, Preferential shareholders who do not have voting power are excluded.
- New section 3A has been inserted, where members of the company can be severally liable in some cases.
- Validity of name approval at the time of incorporation has been changed from 60 days from the date of application to 20 days from the date of approval. Further, in case of change in name by an existing company, name reserved by the RoC shall be valid for 60 days from the date of approval.
- It is proposed that the company shall within 30 of its incorporation have registered office instead of current requirement to have registered office on and from the fifteenth day of its incorporation.
- Notice of every change of the situation of the registered office shall be given to the Registrar within 30 days of the change, who shall record the same. Another change is the time frame for filing the form has been increased from 15 days to 30 days.
- Few changes have been made to private placement where, the offer should not provide for a renunciation right and unless allotment has been made and return of allotment has been filed with the Registrar, the company is cannot use the funds thus raised. The return of such allotment should be filed within a period of 15 days.
- Now sweat equity shares can been issued any time post incorporation.
- Requirement of deposit insurance is no more required.
- The Central Government can now prescribe the charges for which S. 77 becomes inapplicable after consultation with the RBI.
- Now, it is sufficient that the web-link of the annual return be disclosed in the board report and attaching Form MGT-9 to the Board’s report has been omitted.
- Filing with the registrar for a change in promoter’s stake in MGT-10is not required.
- Now, Annual General Meeting (AGM) of an unlisted company can only be held at any place in India if consent is given in writing or electronic mode by all the members in advance.
- An Extra Ordinary General Meeting of wholly-owned subsidiary incorporated outside India can be held outside India too.
The full text of the amendment act is available in below link: